Sun Life still searching for bancassurance partner

MANILA, Philippines - Sun Life of Canada (Philippines) Inc. is still in the market for a bancassurance partner or a joint venture to sell its life insurance products within a bank’s branch network.

“We are developing our alternative distribution network which includes not only banking institutions but also other alternatives that will address the youth and middle market sectors,” Rizalina G. Mantaring, chief executive officer and president of Sun Life of Canada (Philippines) Inc., said in a press briefing.

Bancassurance allows a life insurer to sell its products not only within a bank’s branch but also tap into the bank’s clientele. But under the existing regulatory environment, the bank must have at least five percent equity in the insurer.

Another alternative is to form a joint venture company that will market the insurance products through the banks. A recent example was that of Philippine American Life and General Insurance Co. (Philamlife) and Ayala Life Assurance Corp., allowing Philamlife to sell its products with the branch network of the Bank of the Philippine Islands (BPI).

Mantaring admitted that so far, they have yet to strike a deal with a bank big enough to buy a five percent equity into SunLife Philippines, which the chief executive said would “amount to billions of pesos.”

Meanwhile, the second largest life insurer in terms of premium income last year said they are optimistic in meeting their 2009 targets.

“It looks like we will do better this year compared to 2008, but not better than 2007,” Mantaring added. “The last two months of the year look stronger than the previous quarters.”

The poor performance in October was attributed directly to the two typhoons as the market held back due to uncertainties.

Total premiums last year reached P8.3 billion, lower than the P13.1 billion in 2007.       – Ted Torres